For which years and jurisdictions was Hyper Kidz's evaluation of uncertain tax positions performed?
Hyper_Kidz Franchise · 2024 FDDAnswer from 2024 FDD Document
The Company adopted ASC 740-10-25-6 "Accounting for Uncertainty in Income Taxes", that requires the Company disclose uncertain tax positions. Under the standard an entity may only recognize or continue to recognize tax positions that meet a "more likely than not" threshold upon examination by taxing authorities.
Based on its evaluation, the Company has concluded that there are no significant uncertain tax positions requiring recognition in its financial statements or that would affect the Company's members. The Company's evaluation was performed for the years ended December 31, 2023, 2022, and 2021 for U.S. Federal Income Tax and the State of Maryland Income Tax.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 52)
What This Means (2024 FDD)
According to Hyper Kidz's 2024 Franchise Disclosure Document, the company performed an evaluation of uncertain tax positions. This evaluation was conducted for the years ended December 31, 2023, 2022, and 2021.
The evaluation specifically covered U.S. Federal Income Tax and the State of Maryland Income Tax. Hyper Kidz adopted ASC 740-10-25-6, "Accounting for Uncertainty in Income Taxes," which mandates the disclosure of uncertain tax positions. The standard dictates that an entity can only recognize tax positions that meet a "more likely than not" threshold upon examination by taxing authorities.
Based on their evaluation, Hyper Kidz concluded that there were no significant uncertain tax positions that needed recognition in their financial statements or that would affect the company's members. This means that, for the specified years and jurisdictions, Hyper Kidz believes its tax positions are likely to be upheld if challenged by tax authorities.